CME Group To Reduce Trading Hours

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Exchange also says it is mulling a pause in trading on USDA report days.

A reduction in grain and oilseed trading hours is on tap at the CME although the specific hours have not yet been determined according to a letter today by the CME Group.

The exchange is also surveying customers to determine the path for futures trading, but said, "Though our survey is still underway, we have enough of your responses to be able to decide to reduce trading hours for our grain and oilseed markets, pending CFTC approval. However, as there were varying opinions on what the reduced hours should be, we are continuing to vet alternatives with our customer base. We will be communicating more specifics on the revised hours in the coming weeks. "

The exchange said they are "committed to the integrity of our deep and liquid grain markets and listen intently to feedback from all of our customers. We regret that recent comments in press reports this week were not representative of that commitment." That statement refers to comments recently that the exchange would not alter trading hours despite continued calls for the exchange to take such an action.

Further, CME Group said it was open to considering a market pause to allow participants to digest USDA report data "if all exchanges and trading venues would do the same. We would support a halt, as long as it was unified for all venues, as that would best benefit all customers by ensuring the necessary market liquidity needed for effective price discovery during this time."

Meanwhile, Reuters reports that ICE has already said they do not intend to halt trading around USDA reports.

As for whether USDA will change their report release times in the event that the CME Group reduces trading hours, one USDA contact said until the specific trading hours are known, there's little to discuss relative to this issue. Further, contacts note that the CME Group could alter their trading schedule anyway should USDA alter their report release times.

One source noted that when USDA was contemplating changing the report release times in the wake of expanded trading hours in grain futures, there had been consideration given to moving USDA reports to a time when markets were closed. But when that suggestion was discussed, contacts advise that the CME Group indicated to USDA they would merely change market hours to be able to trade on the USDA data.

COMMENTS:The CME Group is reflecting views of its customers but left vague what they intend to do. And, note their talk of a market pause around USDA report times is dependent on other trading exchanges. The Intercontinental Exchange has not signaled they are willing to reduce trading hours so that suggestion by the CME Group is one that may not become reality. And the issue of whether USDA will change report release times is an empty discussion until the specific trading hours are known.